IRL TO ERL + MMXM Bullish Scenario

Introduction

This scenario represents a structured method for identifying and capitalizing on bullish opportunities in the market. It leverages higher-timeframe Points of Interest (POIs) such as Fair Value Gaps (FVGs), Order Blocks (OBs), or Breaker Blocks (BBs) and incorporates Smart Money Techniques (SMT) divergence to confirm the trade direction.

Timeframes considered are H1/M15, ensuring alignment between higher- and lower-timeframe perspectives.

Key Components

1. HTF PDA (Higher-Timeframe Point of Interest):
   • This area acts as a demand zone, identified through FVG, OB, or BB.
   • It serves as the entry trigger for bullish setups.
2. SMT Divergence:
   • Indicates a shift in momentum, where one instrument or market makes a lower low while another fails to do so, signaling accumulation by smart money.
3. IRL to ERL Transition:
   • IRL: Represents the initial low established after a drop.
   • ERL: The extended low, marking the final reversal point.
4. MMXM (Market Maker Model):
   • A price delivery pattern designed to trap retail traders and benefit institutional players.

Trade Setup Idea

Entry Points (1-4):

1. Entry 1:
   • Place a limit buy at the HTF PDA zone (FVG/OB/BB).
   • Ensure confirmation with SMT divergence to validate the reversal.
   • Use the ERL as the stop-loss buffer below.
2. Entry 2:
   • After the ERL forms and a higher low is created, consider another entry upon confirmation of bullish momentum.
3. Entry 3:
   • Look for pullbacks into demand zones (retracements) formed during the rally, aligning with M15 timeframe structure.
4. Entry 4:
   • Ride the trend by scaling into the position as price breaks above key resistance levels while maintaining structure.

Target Levels:

• Target liquidity areas such as previous highs, breakout zones, or other significant HTF levels.

Risk Management:

• Keep risk-to-reward ratios above 1:3 for optimal profitability.
• Adjust stop-loss levels as the market structure develops to lock in profits.

Summary

This structured approach leverages HTF analysis and SMT divergence for identifying and confirming bullish setups. By understanding the transition from IRL to ERL and aligning with MMXM patterns, traders can anticipate high-probability entries and exits effectively.